Chief Investment Officer
Commercial Loan Automation
BirdsEye Viewwhen the bank next door gets acquired
The article below talks to the tactics of capitalizing upon other banks' acquisitions. The market is heating up again, so opportunities for customer capture are abound.
Also, our family just returned from a very special trip to Israel, where Dick and I renewed our vows, and Egypt, where we were awed by what amazing achievements their civilization has reached 5000 years ago. Pictures of the wedding ceremony (in both Dick's ad mine original garb) and other trip highlights are posted on www.anatbird.com.
I trust you're having a cool and profitable summer,When The Bank Next Door Gets Acquired
Many industry observers are predicting another wave of mergers, which makes 2007 a promising year for community banks. Mergers not only cause the digesting banks to become inward focused for some time, but also create major opportunities for customer dislocation for community competitors. Their tactics vary widely, from billboards advertising "We're your only local bank" and banners announcing "Welcome community bank customers" to more subtle approaches such as renewed telemarketing efforts and scripted teller discussions when customers visit the bank.
There are five pivotal events that create customer dislocation opportunities that community banks eager to capture market share should focus on. These are:
In addition to capitalizing upon each of these opportunities to help the acquired bank's customers make the decision to change, there is another important decision to make: should your campaign be negative or positive. Some banks opt to attack the newcomer and differentiate through negative advertising. Others choose to be positive and avoid knocking the newcomer down. By emphasizing their own localness, strength of product line and customer orientation, they leave the customer to complete the differentiation by comparing these characteristics to the newly acquired bank. Bank styles vary, but I believe that positive competition and highlighting your own strengths without putting the competitor directly down is a more effective approach in community banking. We don't have to show how poorly run the new bank is; we only need to demonstrate how good we are, the other will pale by comparison.
The most important step in preparing to capture share as acquisitions occur is to be prepared. Know in advance your posture, the target customers you want to go after (including those who seemed hopeless for years) and the marketing campaign you intend to launch. Swift response to market changes as soon as they occur will give you a leg up, and will demonstrate once again that you are a nimble and non-bureaucratic organization, unlike your competitors.